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Air-borne dust, nuisance and lost productivity damages: the Ontario Court of Appeal finds its answer “blowin’ in the wind”

The facts underlying a recent ruling, TMS Lighting Ltd. v. KJS Transport Inc., 2014 ONCA 1, read like a law school exam question — i.e., when the business carried on by a manufacturer of delicate lighting fixtures is disrupted by air-borne dust caused by the activities of its neighbour, a trucking company, is the lighting company permitted to sue in either nuisance or trespass? Is the lighting company’s particular sensitivity to dust relevant in assessing whether or not there has been “unreasonable interference” with its use of its lands? What is the proper scope of damages recoverable by the lighting manufacturer, and does it include damages for lost productivity?

The trial judge ruled that actionable nuisance had been committed and awarded generous damages to reflect, inter alia, the plaintiff’s lost productivity. The Court of Appeal affirmed, but varied, this ruling.

More specifically, the Court of Appeal confirmed that the trucking company’s use of its unpaved parking lot resulted in the creation of dust which entered the lighting company’s premises and interfered with its manufacturing activities. In the circumstances, the entry of the dust satisfied the test for nuisance, as it constituted “an interference with a plaintiff’s use or enjoyment of land that is both substantial and unreasonable.” An assessment of “unreasonable” conduct is always highly contextual. As noted by the Court:

While the courts are not limited by any specific list of factors in assessing the gravity of the harm occasioned by the defendant, such factors as the severity of the interference, the character of the neighbourhood, the sensitivity of the plaintiff to the harm caused, and the frequency and duration of the interference may be relevant under the reasonableness inquiry.

The trucking company argued that the unique sensitivity to dust of the plaintiff’s manufacturing operations should not properly have been considered by the trial judge. The Court of Appeal disagreed, and approving quoted the trial judge’s treatment of the issue:

[W]hile TMS’s manufacturing process was sensitive to dust, its sensitivity was not unique in the area. Its use of its property was consistent with the use that its neighbours made of their properties, including retail warehouses, small manufacturing concerns, and professional offices. TMS’s sensitivity to dust is not what made KJS’s failure to pave its [parking] lot for four years unreasonable, although it contributed to the extent of damages TMS suffered because of it.

The second issue related to the scope of damages available to the plaintiff. The lighting company had argued successfully in the court below that its workers had been forced to spend a considerable amount of their time addressing and remediating the problems caused by the dust entering the premises, and that the resulting lost productivity was compensable in damages.

The Court of Appeal confirmed that such losses had been suffered, and could be recovered. However, the Court rejected the trial judge’s decision to develop and apply his own methodology for calculating these losses:

[I]n my opinion, it is not open to a trial judge to postulate a method for the quantification of damages that is not supported by the evidence at trial. Nor is it open to a trial judge to employ an approach to the quantification of damages that the parties did not advance and had no opportunity to test or challenge at trial.

In light of these concerns, and given the requirement for expert evidence needed to calculate such damages, the Court ordered a new trial limited to the assessment of damages.

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